Sramana Mitra: Talk to me a little bit about competition. This is very standard, right? Going from an on-premise to SaaS subscription model, businesses will always take a hit and then come back to a growth path. That’s very standard process. My next question is more a question on competitive landscape ecosystem. What is your positioning? What makes customers choose you over other competitors and who are those competitors?
Hamid Shojaee: Our biggest and most successful competitor has been Atlassian.
Sramana Mitra: Australian company, right?
Hamid Shojaee: That’s right. What’s interesting is that since the early years, the market has changed quite a bit over the years. In the 2002 to 2010 time frame, I’d say that developers were married to the stack of tools that they used. If for example you were a Java shop, you wanted to use Java-developed tools. Because I was from Microsoft, our product was dot net-based. Therefore, we grew much more rapidly in the dot net world than the Java world. If you used anything other than dot net, you probably didn’t have our product because you have to install dot net on your servers. All that stuff mattered because non-dot net developers would not touch those tools. That’s just the way they are.
That started going away once the transition to SaaS started happening because nobody cares now what platform their website is running on now. Atlassian being non-dot net grew as a result of non-dot net adoption growing more rapidly than dot net adoption. Microsoft already had a large base of developers that we were selling into. That flattened out fairly quickly. The open source world was growing very rapidly. This is all speculation but if I were to speculate, a lot of Atlassian’s growth has to do with this open source movement over the past 15 years. They have their product that competes directly with our product.
What we have done in the past several years with the way we differentiate our products from everyone is we really focused on user experience much more than most companies do. Our product is a little bit more intuitive. This is something that customers agree on. It’s more intuitive and easier to use. If the tool doesn’t get used, it’s completely worthless. Making sure it’s easy to use for the team members is critical.
The other thing we have done is focus on this scrum community. For the past five to six years, we recognized this scrum as probably one of the best place to develop software. What we’ve done is create the educational material to learn scrum and also create the tools to help you easily implement scrum within the organization. That’s been the key for us to become the number one selling scrum software.
Sramana Mitra: You’re a $5 million company. You’ve made the switch from a licensed software to SaaS. Are you doing a suite of products?
Hamid Shojaee: Axosoft development tools has a suite of products. It’s a scrum tool, which is our flagship product. We have a bug tracker, which we’ve made free with the $1 contribution to our Axosoft Startup Grant Program as a means to get every development in the world to have a great tool to use that’s powerful, feature-rich, and free. So, there’s no barrier to entry. We have a help desk ticketing tool. That’s the suite of development tools. The whole suite is geared towards software developers.
In our history, we’ve experimented with a variety of different things. Everyone’s come out with this Google 20% time. Before we even knew about that concept, what we had implemented at Axosoft and still do to this day, every year after major releases, is that we’ll take 30 days off for the bug team and have them work on an unrelated product as a means of education for the teams to be able to expose themselves to technologies that they might not have day-to-day exposure to as well as to try out new ideas and see what kind of soft spot sticks. That 30-day process has created a number of things for the company. We have a website called transferbigfiles.com and that is a result of one of those projects. Now, it’s a product that has its revenues. We have another product called Pure Chat, which is also a result of one of those experiments that also has its own product. It has no revenues yet but the user adoption on that is pretty phenomenal.